A PwC report warns rising gambling taxes and tighter rules risk pushing more players to unlicensed sites, with trade bodies continuing to urge balanced regulation to protect consumers and revenues.
A new report has warned that rising taxes and tighter regulation could fuel a surge in black market gambling across Europe, according to the Betting and Gaming Council.
The study, conducted by PwC, focused primarily on the online sector and examined how tax levels and regulatory frameworks affect online gambling markets across Europe. It found that around six percent of all online betting and gaming in the UK now takes place on unlicensed websites – a notable rise from PwC’s 2021 estimate of 2.3 percent. Using data from H2 Gambling Capital, the report also showed ‘channelisation’ – the proportion of gambling carried out with licensed operators – has fallen from 99 percent in 2020 to 94 percent in 2024.
However, the key blow – particularly for government treasuries, regulators and third sector support charities – is the analysis highlighted more pronounced black market activity in countries with restrictive regimes, including France (43 percent channelisation), Sweden (65 percent) and the Netherlands (63 percent). By contrast, Spain and Denmark, which apply moderate tax rates and maintain open licensing systems, recorded significantly stronger channelisation at 89 percent.
“Britain has one of the safest gambling markets in Europe but if the Treasury isn’t careful, we could quickly end up like France or Sweden, with huge black markets contributing nothing in tax, offering zero player protection, and providing no funding for sport or the economy,” warned BGC chief executive Grainne Hurst. “This PwC report should serve as a clear warning. Well-balanced regulation and fair taxes protect players, raise more revenue for the Treasury, and support thousands of jobs. Unlicensed operators do none of those things.”
PwC concluded that higher effective tax rates reduce operator profitability, leading to fewer promotions and “making the player proposition less attractive”.
So what about land based?
Whilst the PwC report offers stark data on the transfer of gambling online from licenced to unlicenced operators, for the land based sector of high street arcades, pubs, bingo clubs and bookies, the transfer of activity is even more concerning. An additional tax rise, on top of NIC increases and the 2025 introduction of a 1-4 percent levy on land based operators and suppliers could be far more damaging to the economy – it’s existential rather than a transfer to another format.
Online operations can move with relative ease – leases, business rates, community commitments are all less of a tie. But for the land based sector, any more tax rises on top of the newly introduced levy, will hit the UK high street harder than any of the prohibition lobby could imagine.
Whilst the Dawn Butler faction in the government are earning £100,000 per year, and the Chancellor significantly more, try explaining to a four generational family business and their employees that they have to pay the cost of a budget hole with their jobs. Try telling the people in local towns that they can’t have their rubbish collected or streets policed because thousands of hospitality businesses were forced to close and there is no income coming in from business rates. Try telling the British public – nearly half of which like to gamble every month in face to face environments – that they can’t play because there are no licensed operators on the high street anymore. And try telling the third sector charities that there’s no money coming in from the Levy because all the gaming and gambling activity in the UK is either shut down,or going into offshore and illegal gambling operators.
Be careful what you wish for. There is a human dimension to higher tax and excessive regulation: and that’s the loss of people’s jobs, the loss of revenue to safer gambling projects and the loss of our high streets because consumer spend has transferred to online rather than on the high street.
